The Bank of Italy said it may have withheld approval for the deal had it known about the indemnity.

Monte Paschi received a $5.5bn government bailout earlier this year. The investigation into the fundraising is part of a wider probe by prosecutors into allegations the lender hid losses using derivatives, manipulated markets and obstructed regulators probing its takeover of Banca Antonveneta SpA in 2008.

JP Morgan should have disclosed the indemnity because it could have reduced the total amount raised for Monte Paschi and the relationship could have affected its financial dealings with the Italian lender, according to the central bank.

Jamie Allen

My name is Jamie Allen and I recently graduated in Journalism from Liverpool John Moores University. My main passion is writing about and watching football but NFL is another interest of mine, you can usually find me up all hours of the night watching sports from across the pond.